SPOUSES RODOLFO CARPIO and REMEDIOS

ORENDAIN, Petitioners, v. RURAL BANK OF STO. TOMAS

(BATANGAS), INC., Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us for resolution is the instant Petition for Review on
Certiorari1 assailing the Decision2 dated September 28, 2001
of the Court of Appeals in CA-G.R. SP No. 58995, and its
Resolution dated April 2, 2002, denying the Motion for
Reconsideration.
The facts are:
On May 17, 1999, spouses Rodolfo Carpio and Remedios
Orendain, petitioners, filed with the Regional Trial Court
(RTC), Branch 83, Tanauan, Batangas, a Complaint (for
annulment of foreclosure sale and damages) against the Rural
Bank of Sto. Tomas, Batangas, Inc., respondent, and Jaime
Ozaeta, clerk of court and ex-officio sheriff of the same court.
In their Complaint, petitioners alleged that they are the
absolute owners of a parcel of land with an area of 19,405
square meters, more or less, located at Barangay San
Vicente, Sto. Tomas, Batangas. On May 30, 1996, they
obtained a loan from respondent bank in the amount
of P515,000.00, payable on January 27, 1996. To secure the
loan, they executed on May 30, 1996 a real estate mortgage
over the same property in favor of respondent bank.
On July 26, 1996, without prior demand or notice to
petitioners, respondent bank filed a Petition for Extra-Judicial
Foreclosure of Mortgage. On September 26, 1996, sheriff
Jaime Ozaeta conducted a public auction sale of the
mortgaged property. Respondent bank was the only bidder for
P702,889.77.
Petitioners further alleged that the sale was conducted
without proper publication as the sheriff's notice of sale was
published in a newspaper which is not of general circulation.
On the same day the property was sold, the sheriff issued a
certificate of sale in favor of respondent bank. On February
25, 1999, respondent bank executed an affidavit of
consolidation of ownership over petitioners' property. They
claimed that they were not notified of the foreclosure sale and
were not given an opportunity to redeem their property.

On August 9, 1999, respondent bank filed its Answer with

Counterclaim, denying specifically the material allegations of
the complaint. It alleged inter alia that oral and written
demands were made upon petitioners to pay their loan but
they ignored the same; that they were properly notified of the
filing of the petition for extra-judicial foreclosure of the
mortgage; that there was proper publication and notices of
the scheduled sale through public auction; and that
petitioners were actually given more than two (2) years to
redeem the property but they failed to do so.
By way of counterclaim, respondent bank alleged that it
suffered: (a) actual damages of P100,000.00; (b)
compensatory damages of P100,000.00; (c) moral damages
of P500,000.00; and (d) litigation expenses of not less
than P50,000.00.

On September 8, 1999, petitioners filed a motion to dismiss

the counterclaim on the ground that respondent bank's
counterclaim was not accompanied by a certification against
forum shopping. ςηαñrοblεš νιr†υαl lαω lιbrαrà ¿

Respondent bank filed an opposition to the motion,

contending that its counterclaim, which is compulsory in
nature, is not a complaint or initiatory pleading that requires a
certification against forum shopping.
On November 3, 1999, the RTC issued an Order denying the
motion to dismiss the counterclaim for lack of merit, thus:
xxx
Under Section 5, Rule 7 of the Rules of Court, the same
requires the plaintiff or principal party to certify under oath
the complaint or other initiatory pleading purposely to prevent
forum shopping.
In the case at bar, defendant Rural Bank's counterclaim could
not be considered a complaint or initiatory pleading because
the filing of the same is but a result of plaintiffs' complaint
and, being a compulsory counterclaim, is outside the coverage
of Section 5, Rule 7 of the Rules of Court.

WHEREFORE, premises considered, the instant Motion is

hereby denied for lack of merit.
SO ORDERED.
Petitioners filed a Motion for Reconsideration of the above
Order but it was likewise denied by the RTC in its Order dated
April 4, 2000.
Thereafter, petitioners filed with the Court of Appeals a
Petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, as amended, alleging that the RTC acted with
grave abuse of discretion in holding that respondent bank's
counterclaim need not be accompanied by a certification
against forum shopping.
In its Decision3 dated September 28, 2001, the Court of
Appeals affirmed the assailed twin Orders of the RTC denying
petitioners' motion to dismiss the counterclaim and dismissed
the petition. Petitioners' motion for reconsideration was also
denied in a Resolution dated April 2, 2002.
Hence, the instant Petition for Review on Certiorari.
The petition must fail.
Section 5, Rule 74 of the 1997 Rules of Civil Procedure, as
amended, provides:
Sec. 5. Certification against forum shopping. - The plaintiff or
principal party shall certify under oath in the complaint or
other initiatory pleading asserting a claim for relief, or in a
sworn certification annexed thereto and simultaneously filed
therewith:
(a) that he has not theretofore commenced any action or filed
any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no
such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete
statement of the present status thereof; and
(c) if he should thereafter learn that the same or similar
action or claim has been filed or is pending, he shall report
that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other
initiatory pleading but shall be cause for the dismissal of the
case without prejudice, unless otherwise provided, upon
motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings
therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal
actions. If the acts of the party or his counsel clearly
constitute willful and deliberate forum shopping, the same
shall be ground for summary dismissal with prejudice and
shall constitute direct contempt, as well as a cause for
administrative sanctions. (Underscoring supplied) cralawlibrary

The rationale of the above provisions is to curb the

malpractice commonly referred to as forum shopping - "an act
of a party against whom an adverse judgment has been
rendered in one forum of seeking and possibly getting a
favorable opinion in another forum, other than by appeal or
the special civil action of certiorari, or the institution of two or
more actions or proceedings grounded on the same cause on
the supposition that one or the other court would make a
favorable disposition."5
Petitioners contend that the trial court and the Court of
Appeals gravely abused their discretion in not dismissing
respondent bank's counterclaim for lack of a certification
against forum shopping.
Petitioners' contention is utterly baseless. It bears stressing
that the Rule distinctly provides that the required certification
against forum shopping is intended to cover an "initiatory
pleading," meaning an "incipient application of a party
asserting a claim for relief."6
Certainly, respondent bank's Answer with Counterclaim is a
responsive pleading, filed merely to counter petitioners'
complaint that initiates the civil action. In other words, the
rule requiring such certification does not contemplate a
defendant's/respondent's claim for relief that is derived only
from, or is necessarily connected with, the main action or
complaint. In fact, upon failure by the plaintiff to comply with
such requirement, Section 5, quoted above, directs the
"dismissal of the case without prejudice," not the dismissal of
respondent's counterclaim.
In sum, we find no reversible error committed by the Court of
Appeals in issuing the challenged Decision and Resolution in
CA-G.R. SP No. 58995.

WHEREFORE, the petition is DENIED. The assailed Decision

and Resolution of the Court of Appeals in CA-G.R. SP No.
58995 are AFFIRMED. Costs against petitioners.
SO ORDERED.